Top 50 Broadliners Weather the Storm with 5.2% Gain

The nation's Top 50 broadline distributors grew by 10 percent as a group in 2008, an impressive gain considering the daunting challenges the industry faced. Together, they inched close to the $100 billion mark, exceeding $97 billion in sales for the year, comprising roughly 80 percent of total broadline sales of $123 billion and 45 percent of total foodservice distribution sales of $217 billion.

The group's performance is particularly noteworthy considering the foodservice industry as a whole contracted by -4.1 percent in 2008, according to Technomic. Some among them beat the odds to realize dramatic gains. Of the 50 companies, nearly half (22) had double-digit growth, 10 grew by more than 20 percent, and one – Doerle Food Services – topped the growth charts with a whopping 113 percent jump in sales from 2007 to 2008. The Broussard, Louisiana, broadliner expanded its capacity and picked up key chain accounts lost by larger competitors in its market. It makes its debut in the ID Top 50 this year, leapfrogging many of its peers to rank 28th with sales of $226 million.

Second among the biggest movers, No. 3 Performance Food Group's 62% gain was due to the integration of volume from Vistar Corp. and Roma Foods, which came with its buyout by those firms' private-equity owners and subsequent merger last May. The company initially refused to report its volume for the year, and ID estimated its broadline segment sales to be flat. After initial publication of the ID Top 50, the company contacted ID with updated figures, necessitating some changes to the lineup.

10 Biggest % Sales Increases
(2008 over 2007)

1.

Doerle Food Services
Broussard, LA

113%

2.

Performance Food Group
Richmond, VA

62%

3.

Saladino’s
Fresno, CA

41%

4.

Merchants Foodservice
Hattiesburg, MS

32%

5.

Maines Paper & Food Service
Conklin, NY

30%

6.

Glazier Foods
Houston, TX

25%

7.

Wood Fruitticher Grocery Co.
Birmingham, AL

23%

8.

Ben E. Keith Foods
Fort Worth, TX

22%

9.

Driscoll Foods
Clifton, NJ

22%

10.

Labatt Food Service
San Antonio, TX

20%

While big gains were made by many, however, other Top 50 firms clearly struggled in 2008. Fifteen companies had sales gains lower than the group’s 5 percent average and six failed to make any gains for the year. Among those, two—U.S. Foodservice and Glover Wholesale—reported sales declines of 1 percent and 2 percent, respectively.

Michigan-based, family-owned Gordon Food Service (GFS), with 2008 sales of $6.8 billion topped the dollar sales-gain chart for 2007 by adding $800 million and for 2008 ranks fourth in this regard with another $600 million in sales added.

All told, the top 10 dollar sales gainers accounted for fully 92 percent of the collective $8.575 billion dollar sales increases made by the 2009 Top 50 distributors. Outside of Performance Food Group's integration of Vistar and Roma, Reinhart's acquisition of IJ Company, most of the gains were made internally.

10 Biggest $ Sales Increases
(2008 over 2007, in millions)

1.

Performance Food Group
Richmond, VA

$3,900

2.

Sysco Corp.
Houston, TX

$1,480

3.

Maines Paper & Food Service
Conklin, NY

$ 629

4.

Gordon Food Service
Grand Rapids, MI

$ 600

5.

Reinhart FoodService
La Crosse, WI

$ 512

6.

Ben E. Keith Foods
Fort Worth, TX

$ 366

7.

Labatt Food Service
San Antonio, TX

$ 135

8.

Doerle Food Service
Broussard, LA

$ 120

9.

Saladino’s
Fresno, CA

$ 112

10.

Merchants Foodservice
Hattiesburg, MS

$ 76

Three companies that appeared on the 2008 Top 50 are no longer included. Clark National has exited broadline distribution to focus on its specialization in nonfoods and janitorial; IJ Company was acquired by Reinhart; and Hansen Distribution Group, which last year ranked 30th with sales of $210 million, declined all participation.

Taking their places are Doerle, along with newcomers Ginsberg’s Foods of Hudson, New York, ranked 47th, and Pocono Produce Co. of Stroudsburg, Pennsylvania, coming in as No. 50. Ginsberg’s is a UniPro distributor, while Pocono is a member of the F.A.B. and PRO*ACT groups.

Other rankings of note have Ben E. Keith nudging rival Shamrock Foods out of the No. 10 spot thanks to 22 percent growth in 2008 that took the company past the $2 billion milestone. Fellow Texan Labatt Food Service claims the No. 8 position. Labatt soared past Cheney Brothers Inc. with a 20 percent gain. Glazier Foods, Saladino’s, Merchants and Feesers each moved up five spots in the rankings, and Yancey’s gained six positions with a 15 percent sales increase over 2007.

No. 1 Sysco, of course, remains untouchable. Perched far above its closest competitor, with 2008 calendar year sales of nearly $38 billion, the industry’s only remaining public company continues steady, albeit slower, growth. Sales for the year grew by 4 percent in 2008 compared to 7.4 percent in 2007. Sysco makes up 40 percent of total Top 50 sales and 30 percent of the total broadline foodservice distribution market. The company continues to focus on gaining operational efficiencies to offset recession-spurred revenue losses.

Indeed, the recession continues to weigh heavily on distributors large and small. Asked what they see as key issues for the year, Top 50 executives overwhelmingly said helping customers survive through the economic downturn is a top strategic priority. At the same time, they’re focusing in hard on collections and bad debt, and working tirelessly to grow street sales. Other concerns expressed include deflation, difficulty on the part of operators to secure financing, more government regulation and, in general, a less business-friendly administration.

ID would like to express sincere thanks to executives and assistants from the Top 50 companies, and others whose companies have not yet made the list, for their cooperation and for providing data that enables us to publish this invaluable industry overview.